Oil prices jump as Russia considers OPEC meet

Oil markets rallied Thursday as Russia said it was ready to meet with OPEC to discuss recent renewed falls in crude prices amid reports it could trigger an output cut.

Russia's energy minister said Moscow is ready to take part in a meeting of the Organization of the Petroleum Exporting Countries aimed at establishing possible "coordination".

Oil prices have suffered a rapid descent this month -- building on a slump stretching back to mid-2014 -- on snowballing concerns over a crude supply glut, weak demand growth and a strong dollar.

Prices slid early on Thursday before rebounding on the prospect of talks between non-OPEC oil producing giant Russia and the cartel -- and on reports a production cut could be agreed aimed at propping up the market.

At about 1700 GMT, US benchmark West Texas Intermediate for delivery in March was $1.06-higher at $33.36 a barrel.

Brent North Sea crude for March grew $1.09 compared with Wednesday's close to stand at $34.19.

Julian Jessop, head of commodities research at Capital Economics, said Thursday's price jump -- which saw Brent reach a three-week high of almost $36 at one point -- was thanks to "speculation that Saudi Arabia and Russia could soon agree to cut output".

Jessop was however sceptical "that anything tangible will come of the latest calls for coordinated action".

He added in a note to clients: "Unconfirmed reports that Saudi Arabia has offered to cut oil output by up to five percent if Russia does the same should be taken seriously, if only because the two countries each produce around 10 million barrels per day. This represents almost 20 percent of global supply."

The world remains awash with oil supplies, a situation that has been fuelled by OPEC's refusal to curb crude output as the cartel's Gulf-state members look to squeeze out US shale producers.

The Saudi-backed strategy is aimed also at pressuring Russia -- the world's biggest oil producer -- and forcing fellow OPEC member Iran to trim output as Tehran looks to hike its own production after the lifting of Western sanctions.

Russian Energy Minister Alexander Novak was meanwhile quoted as saying by Russian news agencies on Thursday that "OPEC countries are currently trying to convene a meeting with the participation of member countries and non-members in February".

He added: "Some countries have proposed this initiative and the question is being studied by different nations. From our side, we have confirmed the possibility of our participation."

Novak said that a meeting could allow for "consultations about the situation on the market, the low price and possibilities for coordination in terms of production."

According to Bloomberg News, OPEC delegates claimed that they have no meeting planned with Russia.

"It's possible that Russia could be testing the waters to gauge how OPEC members would respond to the idea of cuts," said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University.

- Record US supplies -

Oil prices meanwhile slid in earlier Asian trading hours, a day after official data revealed that US commercial crude stockpiles had climbed to a record level, further stoking worries about global oversupplies.

The US Department of Energy on Wednesday reported that the country's commercial crude inventories last week jumped 8.4 million barrels to 494.9 million -- the highest amount on record.

Rising inventories typically signal weak demand in the world's top oil consuming nation and puts further downward pressure on prices in a saturated market.

But in what has been an extremely volatile week's trading, oil futures have enjoyed strong gains also on hopes of stimulus measures in the eurozone and Japan.